Natural Gas Prices Could Trade within an Uptrend Channel
Crude Oil and Natural Gas Prices Are Range Bound
Symmetrical triangle
Natural gas futures contracts for August delivery show the emergence of a symmetrical triangle within an uptrend channel. Gas prices are fluctuating between $2.60 and $3 per MMBtu (British thermal units in millions) within this channel. The speculation of a mild weather forecast and hotter weather estimates are influencing natural gas prices.
Key pivots
A symmetrical triangle could swing natural gas prices in either direction. Bears could see the key support at $2.50 per MMBtu. Prices hit this mark in April 2015. Mild weather estimates could push natural gas prices lower. In contrast, the bulls could see the nearest resistance at $3.20 per MMBtu. Prices tested this level in January 2015. The warmer weather and demand from electric power plants could support natural gas prices.
Natural gas price charts suggest that prices could fluctuate between $2.40 MMBtu and $3.20 MMBtu in the near term. Market surveys suggest that natural gas prices could trade between $2.50 and $3 per MMBtu through October 2015. Gas futures for August delivery are trading below their 20 and 50-day moving average as of June 29, 2015.
The performance of ETFs like the VelocityShares 3X Long Natural Gas ETN (UGAZ) and the United States Natural Gas Fund LP (UNG) are impacted by the volatility in natural gas prices. They also affect upstream players like Range Resources (RRC), Energen (EGN), and Bill Barrett (BBG). They account for 2.47% of the Spider Oil and Gas ETF (XOP). These companies have natural gas production mix more than 41% of their total production.
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